Resource Based strategy asserts that
competitive advantage and superior performance of an organization is explained by capabilities
Redundant Capabilities can
become less relevant and become a weakness as industries evolve and change
Dynamic Capability is
the ability of an organization to renew and recreate its strategic capabilities to meet the needs of changing environments
Threshold Capabilties (Qualifiers)
are those needed for an organization to meet the requirements to compete in a market and achieve parity with competitors
Distinctive Capabilities (Winners)
are those that create competitive advantage and that others cannot imitate
Four key criteria by which capabilities are assessed (VRIN)
- Value
- Rarity
- Inimitablity
- Non-sustiutability
Organization Knowledge
is the collective intelligence gained through both formal systems and the shared experience of people
The value network
comprises the set of inter-organizational links and relationships that are necessary to create a product or service
Dangers of SWOT Analysis
- no attempt at prioritization
- over generalization
3 SWOT is not used to guide strategy
Components of Strategic Capabilities
- Physical ( machines, productivity )
- Financial ( cash flow, ability to raise funds )
- Human ( Managers, knowledge )
Core Competences
linked set of skills that deliver customer value and differentiate a business from competitors
Criteria for the inimitability of strategic capabilities
Complexity, Causal ambiguity, culture and history, change
Tacit Knowledge is
personal, context-specific and difficult to imitate
The Value Chain
describes the categories of activities within an organization which create a product/service
Use of Value Chain
- identifying activities strengths and weaknesses
- identifying sources of sustainable advantage
- Looking for ways to enhance value or decrease costs
Uses of the Value Network
- identifying profit pools
- Deciding which activities to do “in house”
- Partnering and relationships
Ways of Diagnosing organizational Capabilities
- Benchmarking
- analysing value chain and network
- Activity Mapping
- SWOT Analysis
